Hanwha to Become Third Largest PV Cells Producer with Capacity of 2.3GW

Hanwha Group becomes the third largest solar cell manufacturer in the world through the successful acquisition of German solar company Q-Cells.

On Aug. 29, Hanwha Chemical, through its subsidiary Hanwha Solar Germany GmbH, finalized the deal with Q-Cells to acquire their German headquarters, production facilities in Germany and Malaysia and sales offices in U.S., Australia and Japan.

With this deal, Hanwha Group is to obtain Q-Cells’ headquarter office, cell and module production facilities (200MW/120MW) in Germany, cell production facility (800MW) in Malaysia and sales offices in U.S., Australia and Japan. The total cell production capacity acquired from this transaction is equivalent to 1GW.

The total acquisition value is €40 million (around KRW 55.5 billion) with possibility of further negotiations until closing.

Hanwha has effectively renegotiated to buy in the existing loan agreement (MYR 850 million/around KRW 300 billion) signed between Q-Cells Malaysia and the Malaysian government. With a strong support shown by the Malaysian government, the loan has been structured in such ways that Hanwha can use the profits generated from Malaysian operations to pay back in the long-term.

Seung-Youn Kim, chairman of Hanwha Group, at the 2012 New Year’s speech, said, “Due to global economic recession, the solar industry is going through some difficulties. However, we are determined to seize the opportunity upon the market recovery. Until now, human beings relied heavily on fossil fuels to come this far, but I believe that green energy is our future. Our vision of becoming a globally leading company in solar energy remains unchanged and we will continue to pursue that.”

With Q-Cells’capacity of 1GW added on to the existing Hanwha Solar’s cell production capacity of 1.3GW, Hanwha will reach the total annual production capacity of 2.3GW, and becomes the third largest solar cell manufacturer in the world.

Q-Cells filed for bankruptcy on April 3 this year due to downturn in the global solar industry, European sovereign debt crisis and reduction in German government solar subsidy. Even so, Q-Cells has remained as a leading global solar player, with revenues of €1,354 million and €1,023 million, in 2010 and 2011 respectively.

Since 2007, Q-Cells has strengthened its capabilities in its system business including development, finance and sales through its EPC program (Engineering, Procurement and Construction), which accumulated to 550MW of track record.

Q-Cells is well-known for its best-in-class R&D researchers and engineers specializing in solar cells and manufacturing innovation. Hanwha Group will add tremendous R&D capabilities to its own solar R&D center in Silicon Valley, Korean and China through the acquisition of Q-Cells, and it will help the group to secure the favorable position to become the globally leading solar company in the near future.